Insurance Journal Forums

So would you provide 5 years of loss runs?

We provide whatever we can get from the property owner. The more information the better, obviously.

This service would not be my preferred way of doing business. I am guessing that it would be quite popular with new agents and bucket shops. No offense, but I think the type of client this service would attract would be shopping every year and not very profitable over the long term. To answer your original question, I probably would not use it but I do think there would be a demand for your service.

This is probably somebody who is unhappy with his current agent and is shopping for a new one.

Oh boy, if I only had a dollar for every account I have seen where the insured is "unhappy with his current agent." Some of the reasons for this include:

1. Insured low-balled his exposures going in and got hit with a big additional premium at audit.

2. Insured is slow pay and the broker is constantly begging and pleading for money.

3. Insured pays with bad checks and the broker has to take the insured to court to get paid.

Funny how many times I have seen this as a reason for the account needs to be replaced. Sometimes the insured and the incumbent kiss and make up as well, of course at the very last possible moment. The insured may be angry with the incumbent but if that incumbent comes through with a dynamite quote -- much better quote than the new broker, guess who wins?

When I see the current premium and carrier as being decent and the reason the "new broker" is working on the account is because the insured is unhappy with his current broker I say - try to find out why.

Nice Surplus Lines Broker wrote:This is probably somebody who is unhappy with his current agent and is shopping for a new one.

Oh boy, if I only had a dollar for every account I have seen where the insured is "unhappy with his current agent." Some of the reasons for this include:

1. Insured low-balled his exposures going in and got hit with a big additional premium at audit.

2. Insured is slow pay and the broker is constantly begging and pleading for money.

3. Insured pays with bad checks and the broker has to take the insured to court to get paid.

Well, it goes both ways. Let's not try to pretend that every agent/broker with one of these accounts is a perfect angel, either. I have heard from some pretty good, prompt-paying accounts that they weren't thrilled with their agent, for whatever reason. You get 300,000 or so accounts, and a similar number of agents, and you wil find explanations both ways.

Of course, sorting out the facts and getting the business you want is one of the key skills of the game whatever method you use to get business.

I would also comment that a good friend of mine has had a pretty good-sized property and casualty brokerage for some time and doesn't seem to have a problem getting paid. Maybe there is something you could improve about your operation if that is a problem.

Funny how many times I have seen this as a reason for the account needs to be replaced. Sometimes the insured and the incumbent kiss and make up as well, of course at the very last possible moment. The insured may be angry with the incumbent but if that incumbent comes through with a dynamite quote -- much better quote than the new broker, guess who wins?

Doesn't the dynamite quote always have a big advantage? But, in this case, the person who comes through with the dynamite quote is the person who won the bidding for the submission to that particular carrier. You would have just as good a chance to get that as the incumbent.

When I see the current premium and carrier as being decent and the reason the "new broker" is working on the account is because the insured is unhappy with his current broker I say - try to find out why.

Just curious -- wouldn't that make you naturally suspicious any time any new account even agreed to talk to you? Seems like you would be the "new broker" every time.

As far as the current premium and carrier - isn't that subject to change each year? Why would someone stay with the same carrier if another carrier came back with a better price for the same coverage? (Except in cases where the agent is the brother-in-law and the owner is willing to give up one dollar to give fifteen cents to his brother-in-law)

As I said before, these accounts are developed the same ways you would develop new accounts. The people who respond to it will be pretty similar to what you would see if you did the marketing yourself.

BTW, because you are a surplus lines broker, let me ask you about another idea we had. We were thinking of providing a central clearinghouse where anyone with a strange risk could post it to all the surplus lines brokers and carriers that were interested in that sort of thing. Hypothetically, the agent posts in on the web site and it goes out automatically to every surplus lines broker and carrier.

Cost? Free.

Would you see any value in that?

I would have a problem with having a third party complete apps for an account that generated a large premium just because of the complexity of the account. Who would be completing the apps? Seasoned commercial agents who know the right questions to ask or a $10. an hour newby just filling in the blanks? If there's a claim down the road, and the exposure wasn't clearly defined and correctly covered, who's E&O is going to come into play? Also, on any account there are going to be questions from the underwriter(s) that aren't covered on supplementals and accords and if I have no contact with the insured, how am I supposed to answer them? And specific details on claims are always requested by underwriters.

I think it's nice to see a creative idea to make money in this industry, however, it's not practical. This business is hard enough with personal lines companies and bucket shops training auto clinets that it's all about shopping for the best price without moving that mentality into the commercial world. Insurance agents already have enough trouble with the public's preconceived notions of how we earn our living (the average person out there believes we get paid the full premium rather than the shrinking commission we all know is our income) without making every account about the lowest price. I know I've said this before, and alot of you either don't get it or don't want to, but we are not here to sell insurance - we are professionals who's responsibility is to protect our client's assets. Remember the old adage "you get what you pay for"...

CATHIEA wrote:I would have a problem with having a third party complete apps for an account that generated a large premium just because of the complexity of the account. Who would be completing the apps? Seasoned commercial agents who know the right questions to ask or a $10. an hour newby just filling in the blanks?

Good question. The general program is being put together by an agent with 25 years of experience in the field who is well-appreciated by several major carriers for his ability to construct complete apps. The information will come directly from the property owner. Each app will be checked by trained CSRs at an initial level and then reviewed by a supervisor before it is submitted for sale.

If there's a claim down the road, and the exposure wasn't clearly defined and correctly covered, who's E&O is going to come into play?

We aren't really a part of the transaction so all the normal rules of the game would apply.

Also, on any account there are going to be questions from the underwriter(s) that aren't covered on supplementals and accords and if I have no contact with the insured, how am I supposed to answer them? And specific details on claims are always requested by underwriters.

You are free to call the insured for clarification after you have won the right to quote. You will be given all the contact information.

I think it's nice to see a creative idea to make money in this industry, however, it's not practical. This business is hard enough with personal lines companies and bucket shops training auto clinets that it's all about shopping for the best price without moving that mentality into the commercial world. Insurance agents already have enough trouble with the public's preconceived notions of how we earn our living (the average person out there believes we get paid the full premium rather than the shrinking commission we all know is our income) without making every account about the lowest price. I know I've said this before, and alot of you either don't get it or don't want to, but we are not here to sell insurance - we are professionals who's responsibility is to protect our client's assets. Remember the old adage "you get what you pay for"...

I appreciate your comments and I see some truth in what you say.

It seems to me that some people will shop on price and some people will shop on relationships and service. Some people are willing to pay more for that sort of thing and others aren't. If they aren't willing to pay more then the problem is going to be the same however they come across your desk.

If they are the kind of person who values service and relationships then the property owner can always change the rules to suit you. The whole thing is driven by what the property owner wants to do. If he doesn't want to allow some agent to quote, then the agent won't be able to see the account at all. On the other hand, if he decides that your service is so good that he wouldn't want anyone else, then he can decide that you are the only one to bid at all, or the only one to bid on selected companies.

If you compete on price, then it seems this might be just the thing for you. If you compete on service then the whole thing may be moot because the other agents wouldn't have a chance, anyway. One of the rules of this is that the property owner directs all calls from other agents to our web site, except during the quoting process. Therefore, you do get a perfect chance to build that relationship for a solid year after you have won the account.

But then again, you have already seen the internet come to life insurance, auto insurance, homeowners, etc. We could have figured that was coming. We could also figure that -- sooner or later -- somebody is going to figure out how to do the other, more complicated lines of insurance. After all, it would be hard to argue that the current ACORD forms are the be-all, end-all of technology for this area.

So, whether this idea is it or not, we can probably expect someone else to come along with some other idea before too long. Whatever it is, the same set of problems are going to have to be faced. I think agents are going to have to do some survival-of-the-fittest adaptations sooner or later, no matter what.

Been in P&C 35 years. I won't send apps for quotes on property I haven't visited personally. I also do hazard surveys and always talk to the building, vehicle, and equipment maintenance people. My field glasses get me a nice close-up of the roof as well as other items of interest. When I acquire a risk via agent or broker of record change, I check everything twice as close and do new apps, etc. because the prior agent or broker may have been an incompetent clown - don't think they are not out there! I NEVER trust existing policies to reveal the risk. What is proposed by the originator of this thread is that we buy specifications in the form of "pre-completed applications". If a business is really concerned with getting value, hire a professional consultant that charges for services only (just like in financial planning...), have him/her do a thorough competent job, and draw up the specs. By the way, have any agents or brokers out there ever paid for a copy of insurance specs ?
Methinks someone is re-inventing specs and trying to make some $. Now this would be known as "bend over agents and brokers" time. I love this industry. Somebody always on the periphery trying to get more $$$ out of the "slowly being strangled golden goose of P&C insurance".

darnovak wrote:Been in P&C 35 years. I won't send apps for quotes on property I haven't visited personally. I also do hazard surveys and always talk to the building, vehicle, and equipment maintenance people. My field glasses get me a nice close-up of the roof as well as other items of interest. When I acquire a risk via agent or broker of record change, I check everything twice as close and do new apps, etc. because the prior agent or broker may have been an incompetent clown - don't think they are not out there! I NEVER trust existing policies to reveal the risk. What is proposed by the originator of this thread is that we buy specifications in the form of "pre-completed applications". If a business is really concerned with getting value, hire a professional consultant that charges for services only (just like in financial planning...), have him/her do a thorough competent job, and draw up the specs. By the way, have any agents or brokers out there ever paid for a copy of insurance specs ?
Methinks someone is re-inventing specs and trying to make some $. Now this would be known as "bend over agents and brokers" time. I love this industry. Somebody always on the periphery trying to get more $$$ out of the "slowly being strangled golden goose of P&C insurance".

So who said you couldn't visit the properties and do your own investigation? A good deal of that will already be done, but it you want to do your own, that's fine, too. As a matter of fact, we even created a formal inspection report that agents can use to evaluate those properties on their own.

This isn't really someone from the periphery, either. When you see it on the street it will be backed by at least one major carrier. The reason they will do that is because they have become convinced that this works for their agents.

BTW, have you noticed a change in the way life, auto, and homeowners is sold? Through the net now. The net has some obvious advantages for various kinds of business. If you think the ACORD apps are going to be here fifty years from now, I think you are mistaken. Changes are coming, whether they are particularly comfortable or not. If not me, then someone else. Golden geese don't live forever.

But thanks for your input. Even criticism is helpful.

Interesting ! This may be a peek at the future of commercial lines.....
I just started writing personal lines again around the beginning of April after a 5 year stint doing commercial lines only. We rate online at the carrier's website and get a nice "indication" quote. We then request the carrier to "score" the applicant. I had a real nice prospect who had a clean license, no claims activity, a vehicle 3 model years old, and high limits and deductibles.
Traditionally, this was a highly desirable personal auto risk. Not so when l I obtained the "credit score". The six month premium went from $512 to $850. based solely on the secret scoring formula. Some "experts" maintain a direct cause and effect between low credit score and the POTENTIAL for P&C claims. I have never heard of a 15 or 20 year study having been done to prove the relationship. I maintain it was "backward research" using pure coincidental statistics (you can illustrate any type of cause and effect using this type of junk research). However, credit scoring is here to stay (temporarily, I hope) and I am expecting one or more class action lawsuits to expose this disgusting method of underwriting P&C.
It will be interesting to observe what happens when your "system" hits the road running.

Mmmmm

Danovark I think you may be on to something. After all just look at the courts today, we have class action law suits for a number of silly reasons, why not insurance scoring!!